Mental Health Policy and its Impact on the American Population

In the last 50 years, the U.S. has seen a migration in which individuals diagnosed with a mental illness, defined by the Diagnostic and Statistical Manual of Mental Disorders as “a syndrome characterized by clinically significant disturbance in an individual’s cognition, emotion regulation, or behavior”, are treated not in a mental health institution but rather in prisons, nursing homes, and outpatient facilities. To understand the implications of this trend, it’s important to frame this issue as a cascade of events. For example, we can start with a member of law enforcement, not adequately trained to recognize someone in the throes of a manic phase or a schizophrenic not on their medication, arresting an individual with a mental illness. We then find that this individual, upon release, did not receive treatment and now has trouble reintegrating into their community and is unable to find gainful employment. The combination of a lack of treatment, stable community, and employment leads them to continuous run-ins with the law, restarting a vicious cycle that had led us to a prison population in which the majority has a mental illness.

The move to deinstitutionalize people with mental illness from mental institutions began in the 1960’s and accelerated with the passage of the Community Mental Health Act of 1963. This bill was an important step forward to improve the delivery of mental health care because it provided grants to states to set up community health centers. In 1981, President Ronald Reagan signed the Omnibus Budget Reconciliation Act, which sent block grants to states in order for them to provide mental health services. Aside from these two bills, and the Mental Health Parity Act of 1996, which ensured insurance coverage parity of mental health care with other types of health care, there has been little in the way of significant mental health legislation. Mental health was put on the backburner and the result is a mental health infrastructure in tatters.

During the Great Recession, states cut billions in funding dedicated to mental health. A vivid example of how decreased state funding affects mental health services can be seen in the state of Iowa. The current Governor has been put in the difficult position of balancing fiscal responsibility with maintaining access to mental health care. At one point, there were four state mental health hospitals that provided care to each corner of the state. The Governor closed down two of the facilities to save the state money. While they were old facilities built in the 19th century and cost millions to maintain, many people in Iowa felt that he moved too quickly before alternative services were in place. In addition to closing these mental health facilities, the governor obtained a waiver from the federal government to modernize the state’s Medicaid program and move from fee-for-service to managed care. Under fee-for-service, health care providers are paid for each service provided to a Medicaid enrollee. Under managed care, Medicaid enrollees get their services through a vendor under contract with the state. Since the 1990s, the share of Medicaid enrollees covered by managed care has increased, with about 72% of Medicaid enrollees covered by managed care as of July 1, 2013. The move can be difficult because hospital networks and providers have to contract with a vendor and Medicaid beneficiaries may have to switch providers. Needless to say, it can be an administrative nightmare. The transition in Iowa, to say the least, has been rocky with the vendors threatening to pull out because of tens of millions of dollars in losses. The vendors and the providers might not get paid as much as they want but the people getting the short end of the stick are people on Medicaid, which includes individuals with mental health illnesses.

Given the patchwork of mental health care across the country and the lack of funding, what can be done? According to NAMI, 43.8 million Americans experience a mental illness in a year. Many don’t receive the treatment they need. It’s a multi-faceted problem facing families, employers, health care providers and community leaders. At the federal level, lawmakers have introduced several bills to address mental health. In the United States Senate, a bipartisan group of four Senators introduced S. 2680, the Mental Health Reform Act of 2016. This bill encouraged evidence-based programs for the treatment of mental illness, provided federal dollars to states to deliver mental health services for adults and children, and created programs to develop a mental health workforce.

It was encouraging to see that many components of S.2680 were included in H.R 34, the 21st Century Cures Act, which was signed into law on December 13th, 2016. H.R 34 faces some headwinds because some of the funding portions are subject to Congressional appropriations, and if Congress is feeling austere, they can tighten the purse strings. Moving forward, a major issue of concern for mental health is the future of the Affordable Care Act. Under the Affordable Care Act, states were initially mandated to expand their Medicaid rolls. A Supreme Court decision, however, made the decision to expand optional. So far 32 states, including Washington D.C., have expanded. Some red states, like Iowa, Arkansas and Indiana have utilized the waiver process of the ACA to expand their program. If the ACA is repealed, policymakers will have to contend with the effects on the private insurance market as well as Medicaid.